AUD/USD retreats to 0.7750 area following three-day rally

• AUD/USD stays under bearish pressure ahead of the weekend.
• Rising US Treasury bond yields provide a boost to the greenback.
• US Dollar Index edges higher toward 92.00 on Friday.

The AUD/USD pair closed the previous three days in the positive territory and touched a weekly high of 0.7801 on Friday. However, with the greenback regathering its strength, the pair reversed its direction and was last seen losing 0.45% on the day at 0.7752.

DXY rebounds toward 92.00

Following a sharp decline earlier in the week, a strong recovery seen in the US Treasury bond yields seems to be providing a boost to the USD. The benchmark 10-year US T-bond yield is currently rising nearly 4% at 1.6% and the US Dollar Index (DXY) is gaining 0.51% at 91.88.

Meanwhile, the S&P 500 Futures are down 0.55% on a daily basis, suggesting that the USD could continue to outperform its rivals if safe-haven flows dominate the financial markets in the second half of the day.

Later in the session, the Producer Price Index (PPI) and the University of Michigan's Consumer Sentiment Index data will be featured in the US economic docket. The market reaction to these figures is likely to remain subdued with investors remaining focused on the US T-bond yields.

Despite the recent decline, AUD/USD will manage to post weekly gains unless it drops below 0.7700 in the remainder of the day.

Technical levels to watch for